Yield Farming
Yield Farming is a practice in the world of decentralized finance (DeFi) where users lend or stake their cryptocurrency assets to earn rewards. By providing liquidity to various DeFi protocols, participants can generate returns, often in the form of additional tokens. This process allows users to maximize their earnings on their digital assets.
The rewards from yield farming can vary based on factors like the platform used and the amount of liquidity provided. However, it also comes with risks, such as market volatility and potential losses from impermanent loss. Understanding these risks is crucial for anyone looking to engage in yield farming.